HIGH COSTS AND LOW BENEFITS FAN HEALTH CARE CRISIS; SINGLE-PAYOR HEALTH CARE SYSTEM COULD REDUCE COSTS

Despite the tremendous cost and technological advancements in American medicine, millions of people are denied access to quality health care. Those concerned about our current "health care crisis" can not help but question the discrepancy between the high costs we pay for health care and the low net benefits we receive.

Life expectancy for U.S. females in 1980 was 76.7 years, just one year longer than that for the United Kingdom, but less than that for 14 other countries. For males it was 69.6 years, less than 17 other countries. ~Infant mortality rates are even more striking. In 1985 the U.S. infant mortality rate equaled 10.6 per thousand births, a figure greater than 19 other nations.

37 million uncovered

For many upper-middle and middle class people the health-care system may seem adequate. However, for the rest of society health care remains in doubt. Of the estimated 37 million people currently without health care coverage, over 12 million are children under the age of 18.

Although 85 percent of health insurance coverage is provided through employers, more than 30 percent of employers who pay more than half of their employees the minimum wage do not provide health insurance. Three-fourths of the 37 million uncovered persons are spouses or children of workers and one in four workers earning less than the poverty-level has no health insurance.

Health indicators for Missouri and the U.S. show that our system is not keeping pace with the rest of the world. Missouri's infant mortality rate in 1987 was 10.2 per 1000, poorer than 21 countries including Canada and such third world nations as Singapore and Hong Kong. U.S. life expectancy is 2 years shorter and the mortality rate for heart disease is 20 percent higher ~than in Canada.

High health care costs are a fundamental problem with our present health care system. Over 57 percent more as a percentage of GNP than the average of other industrialized nations.

High costs impose an intolerable burden on business, threaten to bankrupt individuals and families, are the leading cause of labor disputes in our country, and are the primary reason why we have been unable to act to protect the 37 million Americans who have no health insurance.

Plagued by waste

Administrative waste is a primary cause of our high health care costs. According to a study published in the New England Journal of Medicine, "overall, 23 cents of every health care dollar in the U.S. goes for billing and bureaucracy, as compared to 13 percent in Canada."

Administrative and billing costs account for between 18 percent and 19 percent of the expenses of a typical U.S. hospital. The comparable figure for Canada is about 8 percent.

The number of administrators is increasing 3 times as fast as the number of doctors in the U.S.

Administrative waste and overhead are inherent to our present health care financing system. Our present system divides the responsibility for health care financing between roughly 1,500 private insurance companies and a myriad of public programs at all levels of government. Each of these payors has its own bureaucrats, forms, offices, vehicles and other expenses.

Each payor has its own eligibility requirements, payment standards, and other paperwork burdens for providers to deal with.

Private commercial insurers are the least efficient element in this mix. They typically spend 33 cents on overhead for every dollar of benefits they deliver. The comparable figure for large scale public programs like Medicare or the Canadian National Health Program is 2 to 8 cents.

Between 1981 and 1988, the administrative, overhead and marketing costs of commercial insurers increased by 93 percent, even faster than health care costs themselves.

A universal, single-payor health care financing system could reduce these costs. According to the Government Accounting Office (GAO) in a report to Congress released in June 1991, "If the universal coverage and single payor features of the Canadian system were applied in the United States, the saving in administrative costs alone would be more than enough to finance insurance coverage for the millions of Americans who are currently uninsured. There would be enough left over to permit a reduction, or possibly even the elimination, of copayments and deductibles, if that were deemed appropriate."

Single-payor system

The following are some of the major benefits projected if the Russo Bill for a National Universal Health Care System currently being proposed to Congress were enacted:

1.) People get the health care they need, rather than the health care they can afford or their insurance company is willing to pay for.

2.) The nation saves $40 billion in health care costs by substituting a single, publicly-administered and publicly-accountable program for the more than 1,500 private insurance plans now in place. A single plan gets rid of paperwork, marketing and advertising.

3.) Senior citizens save $28 billion one-third of their current health costs and get long-term care, prescription drug, preventive and other new benefits.

4.) The non-elderly save $25 billion and won't have to worry about rising insurance premiums, cost-shifting, paying for children's health bills, or losing health coverage if they change jobs.

5.) Businesses that provide health care benefits to their workers lower their costs, can compete more fairly in the world market, and have more funds available to improve their operations and create jobs.

6.) State and local governments save $12 billion and no longer face the devastating budget impacts of unexpected and skyrocketing health care costs.

7.) Physicians, nurses and other providers spend more time caring for patients instead of filling out insurance forms and justifying their medical judgments to insurance company bureaucrats.

Bill Thompson is Acting Chairman of the Department of Social Work at Southeast Missouri State University.

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